Deutsche Bank downgrades YY rating to 46 US dollars in target price

Sina Science and technology news Beijing time of August 2 night, Deutsche Bank published a study today, the Nasdaq:yy share rating to "hold", and the target price raised to 46 U.S. dollars.

The following is the full report:

The steady implementation and innovative business model of the gathering era rewarded the company's fast-growing number of paid subscribers, while the commercialization initiative made clear progress. Although the market's confidence in the gathering era seems to have improved, we believe that the recent rise in share prices reflects to a large extent the recognition of investors ' return to the risk-reward ratio of the gathering time. According to our earnings forecasts for the 2013 non-US GAAP, the current 2013-year forward earnings ratio of the present share price is 38 times times higher. Based on this valuation, we downgraded the stock-gathering period to "hold".

In the second quarter of the gathering period, revenue grew 118% year-on-year, up 30% to 409 million yuan, exceeding analysts ' average expectations, the company's previous forecasts and Deutsche Bank's expectations. Non-US general accounting standards Net profit rose 184% year-on-year, up 53%, compared with analysts ' average forecasts and Deutsche Bank's expectations of 64% and 40% respectively. In addition, the number of paid subscribers to the core of the era's web games and music business grew by 61% and 174% respectively, reaching a total of 1.1 million. The two businesses contributed about 80% of the total revenue from the time of the gathering. The company's management forecast that third-quarter revenues would rise 88% to 92% Year-on-year, up from an average of 16% per cent on analysts ' forecasts, in line with Deutsche Bank's expectations.

In the second quarter of the gathering period, gross margin remained flat, at 53%. Music business revenue-sharing costs rose 31% in the chain, while the second quarter of the gathering era recorded with Hunan TV "Happy boys" cooperation brought about by the cost of content. We anticipate that, due to the content costs associated with Happy boys, the third quarter of the gathering time gross profit margin will decline. But we expect the performance of the gathering era to ease the pressure on profit margins, not the US General accounting standards operating margin will rise 0.8% to 1%. As a result, we will raise the revenue forecasts for the 2013 and 2014 fiscal periods by 2% and 3% respectively, while the non-US general accounting standards will be raised by 13% and 4% per share.

As the commercialization initiative progressed well, we raised our target share price to $46 trillion. Based on the latest 2013 fiscal year non-US general accounting standards per share earnings forecast of 1.2 U.S. dollars, which is equivalent to a prospective p/e 38 times times. The composite growth rate of the year from 2013 to 2015 is expected to be 47%. Deutsche Bank's 0.8 times-fold increase in revenue for the era of the gathering was more than 0.6 times times earlier, but less than 1.1 times times that of the Internet industry, due to the unprecedented business model of the gathering era, the potential risk of execution, and the lack of support for past performance. (D-Gold)